Preserving & Protecting Your Family’s Assets & Legacy

Use of a “pooled income trust” in connection with Community Medicaid

by | Mar 5, 2024 | Medicaid Planning |

As you may know, as soon as you reach 65, you automatically are entitled to Medicare.  Medicaid, on the other hand, is something you need to apply and qualify for.

You might have heard about Community Medicaid limits on income and resources.  For the purposes of this video, we will only focus on the income aspect of things.

So, what is considered “income” for purposes of Community Medicaid eligibility?  Income is everything you receive on a monthly, quarterly or yearly basis either from your current or prior employment or distributions from your retirement funds or investments.  For example, your work salary, your social security benefits, your pension, distributions from your IRAs or annuities are all considered “income” for purposes for Medicaid.

Now that we got that out of the way, let’s discuss the actual limits of what you are entitled to keep vs what is considered to be your “excess income.”  It is important to note that each year, the income (and asset) limits for Medicaid eligibility change.

While in 2023, the income limit for a single (not legally married) Medicaid applicant was $1,677, in 2024 that figure has increased to $1,732.  Furthermore, in 2023 the income limit for a married couple was $2,268, in 2024 it was increased to $2,351.  Everything above these limits is considered your “excess income.”

You may think to yourself “wow, these limits are way too low! My social security alone is higher than that!” – and you are correct.  You make too much money, and it’s a great problem to have.  Your solutions to this problem are to either (a) pay the “excess” income to Medicaid or (b) establish a Pooled Income Trust.

A Pooled Income Trust is a type of supplemental needs trust that is used in estate/Medicaid planning for purposes of saving and protecting that “excess income.”   Pooled Income Trusts are operated by non-for-profit organizations for the benefit of disabled individuals.  In order to be eligible for this type of trust, the applicant  must be deemed “disabled” in the eyes of the state.  Needless to say, most, if not all, elderly people are indeed disabled in one way or another, and they would easily qualify for this type of trust, with the assistance of Futterman, Lanza & Pasculli.

A Pooled Trust is like a bank account established for the benefit of the Medicaid applicant. In order to remain eligible for Medicaid, the applicant must continue sending his or her contribution to the Pooled Trust every month. The Medicaid Applicant then uses the funds each month to pay almost any expense in the Medicaid Applicant’s name, for example: rent/mortgage, taxes, utilities, phone, cable, and credit cards. It is important to note, however, that any unused funds would remain with the trust company or be transferred to the state that provided Medicaid services upon the applicant’s passing.

Here, at Futterman, Lanza & Pasculli, LLP, we help you to not only navigate the rather complex Medicaid system, but we will also help you with establishing and funding your Pooled Income Trust.


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